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Living in the Bay Area, Max Heninger is all too familiar with high housing costs.
As is he with childcare costs, student loans, and saving for his two kids’ futures.
“We are going to be paying off our student loans for at least another decade,” Heninger, who is facing just under $900 monthly payments between himself and his wife, told Business Insider. “So in a way, it’s like the reverse of saving. You’re paying for your past while you’re also trying to save for your future, your family’s future.”
The 33-year-old works in affordable housing development and identifies as a HENRY, or a high earner, but not rich yet. The term was coined by Fortune’s Shawn Tulley as millennials aged into higher income brackets but felt held back by high costs. Per inflation-adjusted 2023 Census data, the median US household income was just over $80,000.
As a father of a two-year-old and a newborn, Heninger said he and his wife have been putting around $300 a month into their oldest child’s college savings fund, but high day care and housing costs have limited how much they have been able to set aside.
“If you just look at what a lot of upper earners make in the Bay Area, you’re considered very high income in the national context, but you may not feel that way because the cost of living, mainly housing, is so expensive that it doesn’t feel like there’s just lots of disposable income leftover,” Heninger said.
Other parents described similar dilemmas to BI. They said that, despite making six figures, high housing and childcare costs — along with mortgage and student-loan payments — are eating into their budget and leaving them with minimal income to spend or save. While some of those parents are still choosing to put money aside for their kids’ college funds, others said they’re prioritizing experiences with their families, like vacations.
Heninger said that he and his wife have been lucky to pursue education in their fields of interest, and land secure jobs and start a family in an expensive region. After both of his kids are out of day care, he’ll reevaluate his finances and determine what is financially feasible going forward in terms of college savings.
He also said he recognizes that perceptions on higher education are shifting, and as his kids get older, he’ll discuss what their educational priorities are, including whether they want to take a different path — like trade school — that doesn’t involve college.
“It’s just a really transparent, open conversation with the whole family,” Heninger said. “What is the experience you’re trying to get? What can we afford? And then asking, what is college for? Are you going for the education? Are you going for the social experience, the networking? And then, looking at the ones where it would come with a hundred thousand dollars a year price tag, do those really make sense?”
‘I want to do the same for my kids’
One of Susie Ha’s top priorities is ensuring that her three kids have enough money saved by the time they reach college age.
Ha and her husband both have advanced degrees in technology and engineering, respectively, and she said that she wants her kids to have the same educational opportunities that she had to help them be successful later in life.
“As soon as we made a decent income and had multiple kids, that just got me thinking, ‘Wow, I have to be really strategic about my investments and savings if we want our kids to get the quality of education that we got,'” Ha told BI. “We have both very advanced degrees. We were lucky that we didn’t have any loans for it, and I want to do the same for my kids.”
Due to mortgage payments and high childcare costs, Ha said she doesn’t feel rich, and at times, feels financially strained despite a combined income with her husband in the low six figures. Before having her third child this year, Ha said she was putting about $500 every month into her kids’ college savings. With high childcare costs, she said she’ll likely decrease that amount to $300 while her kids are young, and ultimately, she wants to have $200,000 saved in each of her kids’ accounts by the time they want to go to college.
Meanwhile, saving for college isn’t the top priority for Karen, 44, a mom of two teenagers and a 10-year-old. Her kids are in the Catholic school system, and she said that the school expenses, on top of childcare, have totaled over $30,000 a year. Additionally, since both she and her husband work outside the home, they’re spending more money on things like food and house cleaners, which further strains the budget.
“I think part of it, too, is because we’re not home, we prioritize experiences, and want to spend time with our kids,” Karen said.
“So when we have family time, we want to be able to go on vacation, to eat at restaurants, and enjoy the time we have together because for so much of the time, we’re not around and we’re not home,” she continued. “And that’s a choice that we’ve made, and I think it’s the right one for a lot of reasons, but it means that we probably spend more on the time that we are together.”
When it comes to college savings, Karen said she plans to set aside enough money for her kids to attend a state university and have conversations with her children about the options they have to cover any additional expenses.
The College Board found in 2024 that the cost of college has actually been going down because more schools are offering grant aid, bringing the average cost down. Student-loan borrowing has also decreased, the College Board said. While college continues to pay off for most graduates, the growing availability of trade schools and the desire for some students to enter the workforce directly are stimulating a shift in how Americans value college.
Ha wants to be as prepared as possible for what college might look like a decade from now.
“The fact that the United States has such high college education costs, it just really scares us,” Ha said. “If they all want to go to an Ivy League, would I be able to afford it for them? Will my kids have to give up this amazing opportunity because of the money? That made me really start being strategic about my spending.”
Do you make six figures but don’t feel rich yet? Share your story with this reporter at asheffey@businessinsider.com.
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